Decisions of Interest

Pre-Divorce Home Sale Orders Reversed

The Appellate Division, First Department, reversed a lower court's order appointing a receiver to sell a divorcing couple's home, as the court had no authority to order a sale before the divorce was finalized. Moran v. Moran, 113837/08, NYLJ 1202473328197, at *1 (App. Div., 1st, Decided Oct. 12, 2010) (Mazzarelli, J.P., Sweeny, Moskowitz, Acosta, Rom'n, JJ.).

The couple's separation agreement provided that the wife would take over ownership of the home if she could get it refinanced by a certain date. If she could not, she agreed in the signed document to list the home for sale, selecting a broker of her choice and making all efforts to “produce the best sales price available in the market for the expeditious sale of the Real Property.” The wife did list the property, but the husband was unhappy with the price she was asking, which he and his experts deemed to be about $200,000 above the fair market value of the home. The wife also refused to discuss with her husband the lowest price at which she would agree to sell the home.

Due to these differences, the husband asked the court to help him get the home sold immediately. The lower court issued interim orders directing the husband to have the property appraised, and appointing an independent appraiser. The resulting appraised value, which the wife did not see, was consistent with the husband's earlier appraisal. The broker the wife had selected submitted an affidavit to the effect that her asking price was reasonable and that the broker had potential buyers interested in viewing the house at that price.

Finding that the wife had violated the separation agreement by listing the property at a price grossly in excess of any appraised value, the lower court granted the husband's motion to have a receiver appointed to effectuate a sale. That receiver was authorized by the court to list the property with any licensed real estate broker at a listing price $44,000 over the appraised value, to accept an offer at the appraised value within the first 60 days and to accept an offer at a price $50,000 below the appraised value after 120 days.

On appeal, the First Department first noted that it is well settled that, prior to granting a divorce, separation or annulment, courts may not direct the sale of marital property held by spouses as tenants by the entirety, unless the parties have consented to sell. See Kahn v. Kahn, 43 NY2d 203 (1977); Adamo v. Adamo, 18 AD3d 407 (2005). Here, although the wife had indeed agreed to sell the home, it was in accordance with specified terms only. “The court's order directing a sale of the marital property through a broker chosen by a receiver, and at a price set by the court, improperly overrode the parties' agreement that the wife would have 'sole discretion' to select a broker, and supplied price terms that were not agreed to by the parties in the separation agreement,” stated the court. Moreover, the husband did not show any exigency that would justify overriding the rule against a forced pre-divorce sale of property held by a couple as tenants by the entirety.

Reversal was also required, the First Department found, because the parties did not stipulate to be bound by the results of the court-ordered appraisal. The hearing court was therefore required to give both parties the opportunity to review the appraisal, cross-examine the appraiser and offer additional evidence on valuation. See Kesseler v. Kesseler, 10 NY2d 445, 451-452 (1962); Banker v. Banker, 56 AD3d 1105, 1107-1108 (2008). “In no event could the court rely on an appraisal report that was not provided to the parties and not made part of the record (see Samuelsen v. Samuelsen, 124 AD2d 650, 651-652 (1986)),” stated the appellate court, noting that the wife here never saw the court-appointed appraiser's report and was not offered an opportunity to dispute its findings.

Ex-Wife's Interest Superior to That of Ex-Husband's Judgment Creditors

A convicted murderer's ex-wife, whose settlement agreement with her ex-husband entitled her to a 50% share of the proceeds of any sale of stock in his wholly owned company, had a superior right to such proceeds over the estate of his murder victim, which had agreed to accept $8 million in a civil suit brought against the murderer. Rodriguez v. Sepe, 5288/2010, NYLJ 1202473472821, at *1 (Sup., WE, Decided October 01, 2010) (Giacomo, J.).

Plaintiffs, representatives of the estate of murder victim Janette Carlucci, reached an $8 million settlement with the convicted murderer, Robert Sepe, in 2009. Hoping to recover some of that amount, they sought a declaration that they had a superior right to 100% of the shares of stock of The Very Best IRTJ Corp., a company wholly owned by Sepe, whose principal asset is a commercial building. Defendant Irene Sepe, the murderer's ex-wife, had entered into a settlement agreement with Robert Sepe prior to their 2007 divorce, which said that she would receive a 50% share of the proceeds should Robert sell The Very Best IRTJ Corp.'s real property or, if he died while still owning it, that their children would receive a 50% share. Based on the agreement, Irene cross-moved seeking a declaration that she had a superior right to 50% of the proceeds of the sale of the company's stock. Plaintiffs argued that under Robert's and Irene's divorce judgment, Irene merely had a contingent, unsecured interest in 50% of the proceeds of any sale of the company, but the interest was extinguished by the $8 million judgment Robert Sepe confessed to the plaintiffs. The court disagreed, finding that under the terms of the divorce judgment Irene had superior rights. The court stated that, while Irene's right to 50% of the proceeds of the sale of The Very Best ITRJ Corp. “may have been inchoate during the divorce ' that right matured upon the filing of the judgment of divorce. The fact that her right is triggered by the sale of the shares, does not render the right contingent or executory. It is an absolute right.” Therefore, the court concluded that any levy or execution by plaintiffs against Robert Sepe's interest in The Very Best IRTJ Corp. was subject to the interest of Irene Sepe.

No Boundaries for Family Offenses

In a case of first impression, the Second Department has ruled that New York's Family Courts have jurisdiction over claims of familial abuse that occurs outside of New York's borders. Richardson v. Richardson, — N.Y.S.2d —-, 2010 WL 4366892 (2d Dept. 11/3/10) (Covello, J.P., Angiolillo, Leventhal and Sgroi, J.J.).

The alleged assault took place in February 2009 on the Caribbean island of Anguilla, a British territory. The complainant claimed that her mother pushed her to the floor twice. The alleged victim's two children also claimed their grandmother attacked them; one said she chased him with a cleaver and the other alleged she struck him in the head with a glass bowl. Rejecting the grandmother's motions to dismiss the petitions on the grounds that the court lacked subject matter jurisdiction, Nassau County Family Court Judge Julianne S. Eisman granted all three petitioners orders of protection. “The fact that this took place in the West Indies is no different from it taking place in Pennsylvania, Virginia or Vermont,” she held. “They're [all residents] of Nassau County and they're entitled to protection.”

On appeal, a Second Department panel unanimously affirmed, concluding that the Family Court Act does not set geographic boundaries. Writing for the panel, Justice John M. Leventhal stated that the “plain language of Family Court Act ' 812 provides that the Family Court has jurisdiction over family proceedings where the petitions allege the commission of certain proscribed acts ' . There is no geographic limitation in Family Court Act ' 812, or elsewhere in the Family Court Act, as to where a family offense is to have occurred in order to confer subject matter jurisdiction upon the Family Court.”

Pre-Divorce Home Sale Orders Reversed

The Appellate Division, First Department, reversed a lower court's order appointing a receiver to sell a divorcing couple's home, as the court had no authority to order a sale before the divorce was finalized. Moran v. Moran, 113837/08, NYLJ 1202473328197, at *1 (App. Div., 1st, Decided Oct. 12, 2010) (Mazzarelli, J.P., Sweeny, Moskowitz, Acosta, Rom'n, JJ.).

The couple's separation agreement provided that the wife would take over ownership of the home if she could get it refinanced by a certain date. If she could not, she agreed in the signed document to list the home for sale, selecting a broker of her choice and making all efforts to “produce the best sales price available in the market for the expeditious sale of the Real Property.” The wife did list the property, but the husband was unhappy with the price she was asking, which he and his experts deemed to be about $200,000 above the fair market value of the home. The wife also refused to discuss with her husband the lowest price at which she would agree to sell the home.

Due to these differences, the husband asked the court to help him get the home sold immediately. The lower court issued interim orders directing the husband to have the property appraised, and appointing an independent appraiser. The resulting appraised value, which the wife did not see, was consistent with the husband's earlier appraisal. The broker the wife had selected submitted an affidavit to the effect that her asking price was reasonable and that the broker had potential buyers interested in viewing the house at that price.

Finding that the wife had violated the separation agreement by listing the property at a price grossly in excess of any appraised value, the lower court granted the husband's motion to have a receiver appointed to effectuate a sale. That receiver was authorized by the court to list the property with any licensed real estate broker at a listing price $44,000 over the appraised value, to accept an offer at the appraised value within the first 60 days and to accept an offer at a price $50,000 below the appraised value after 120 days.

On appeal, the First Department first noted that it is well settled that, prior to granting a divorce, separation or annulment, courts may not direct the sale of marital property held by spouses as tenants by the entirety, unless the parties have consented to sell. See Kahn v. Kahn , 43 NY2d 203 (1977); Adamo v. Adamo , 18 AD3d 407 (2005). Here, although the wife had indeed agreed to sell the home, it was in accordance with specified terms only. “The court's order directing a sale of the marital property through a broker chosen by a receiver, and at a price set by the court, improperly overrode the parties' agreement that the wife would have 'sole discretion' to select a broker, and supplied price terms that were not agreed to by the parties in the separation agreement,” stated the court. Moreover, the husband did not show any exigency that would justify overriding the rule against a forced pre-divorce sale of property held by a couple as tenants by the entirety.

Reversal was also required, the First Department found, because the parties did not stipulate to be bound by the results of the court-ordered appraisal. The hearing court was therefore required to give both parties the opportunity to review the appraisal, cross-examine the appraiser and offer additional evidence on valuation. See Kesseler v. Kesseler , 10 NY2d 445, 451-452 (1962); Banker v. Banker , 56 AD3d 1105, 1107-1108 (2008). “In no event could the court rely on an appraisal report that was not provided to the parties and not made part of the record ( see Samuelsen v. Samuelsen , 124 AD2d 650, 651-652 (1986)),” stated the appellate court, noting that the wife here never saw the court-appointed appraiser's report and was not offered an opportunity to dispute its findings.

Ex-Wife's Interest Superior to That of Ex-Husband's Judgment Creditors

A convicted murderer's ex-wife, whose settlement agreement with her ex-husband entitled her to a 50% share of the proceeds of any sale of stock in his wholly owned company, had a superior right to such proceeds over the estate of his murder victim, which had agreed to accept $8 million in a civil suit brought against the murderer. Rodriguez v. Sepe, 5288/2010, NYLJ 1202473472821, at *1 (Sup., WE, Decided October 01, 2010) (Giacomo, J.).

Plaintiffs, representatives of the estate of murder victim Janette Carlucci, reached an $8 million settlement with the convicted murderer, Robert Sepe, in 2009. Hoping to recover some of that amount, they sought a declaration that they had a superior right to 100% of the shares of stock of The Very Best IRTJ Corp., a company wholly owned by Sepe, whose principal asset is a commercial building. Defendant Irene Sepe, the murderer's ex-wife, had entered into a settlement agreement with Robert Sepe prior to their 2007 divorce, which said that she would receive a 50% share of the proceeds should Robert sell The Very Best IRTJ Corp.'s real property or, if he died while still owning it, that their children would receive a 50% share. Based on the agreement, Irene cross-moved seeking a declaration that she had a superior right to 50% of the proceeds of the sale of the company's stock. Plaintiffs argued that under Robert's and Irene's divorce judgment, Irene merely had a contingent, unsecured interest in 50% of the proceeds of any sale of the company, but the interest was extinguished by the $8 million judgment Robert Sepe confessed to the plaintiffs. The court disagreed, finding that under the terms of the divorce judgment Irene had superior rights. The court stated that, while Irene's right to 50% of the proceeds of the sale of The Very Best ITRJ Corp. “may have been inchoate during the divorce ' that right matured upon the filing of the judgment of divorce. The fact that her right is triggered by the sale of the shares, does not render the right contingent or executory. It is an absolute right.” Therefore, the court concluded that any levy or execution by plaintiffs against Robert Sepe's interest in The Very Best IRTJ Corp. was subject to the interest of Irene Sepe.

No Boundaries for Family Offenses

In a case of first impression, the Second Department has ruled that New York's Family Courts have jurisdiction over claims of familial abuse that occurs outside of New York's borders. Richardson v. Richardson, — N.Y.S.2d —-, 2010 WL 4366892 (2d Dept. 11/3/10) (Covello, J.P., Angiolillo, Leventhal and Sgroi, J.J.).

The alleged assault took place in February 2009 on the Caribbean island of Anguilla, a British territory. The complainant claimed that her mother pushed her to the floor twice. The alleged victim's two children also claimed their grandmother attacked them; one said she chased him with a cleaver and the other alleged she struck him in the head with a glass bowl. Rejecting the grandmother's motions to dismiss the petitions on the grounds that the court lacked subject matter jurisdiction, Nassau County Family Court Judge Julianne S. Eisman granted all three petitioners orders of protection. “The fact that this took place in the West Indies is no different from it taking place in Pennsylvania, Virginia or Vermont,” she held. “They're [all residents] of Nassau County and they're entitled to protection.”

On appeal, a Second Department panel unanimously affirmed, concluding that the Family Court Act does not set geographic boundaries. Writing for the panel, Justice John M. Leventhal stated that the “plain language of Family Court Act ' 812 provides that the Family Court has jurisdiction over family proceedings where the petitions allege the commission of certain proscribed acts ' . There is no geographic limitation in Family Court Act ' 812, or elsewhere in the Family Court Act, as to where a family offense is to have occurred in order to confer subject matter jurisdiction upon the Family Court.”